As Vietnam is joining and becoming a link in the global semiconductor market, the stocks of several companies involved in the industry have witnessed outstanding performances.

Việt Nam is clearly seeing opportunities to develop and create breakthroughs for the semiconductor industry after foreign research units and businesses have recently seen the country as a destination to invest, set up offices, and open factories.

Particularly, the recent joint statement between Việt Nam and the US also emphasised cooperation in the semiconductor industry. During the visit of PM Phạm Minh Chính to Silicon Valley on 18 September, many US technology companies, such as Nvidia and Synopsys, discussed collaboration in the semiconductor chip sector.

Nvidia wants to enhance cooperation with Việt Nam in semiconductors and artificial intelligence, expecting the country to fully become a production base for the group in Southeast Asia. Meanwhile, Synopsys signed a memorandum of cooperation with Vietnamese agencies to support the development of the semiconductor chip industry and establish a chip design incubation centre.

Analysts have said that Việt Nam is likely to obtain billion-dollar opportunities due to the inflow of investment capital after joining and becoming a link in the global semiconductor market.

Nguyễn Minh Hoàng, general director of FPT Information System Company, a member of FPT Corporation, said that the Vietnamese semiconductor market is expected to increase by US$1.65 billion between 2021 and 2025, with a compound annual growth rate of about 6.52 per cent a year.

In 2022, FPT announced the establishment of FPT Semiconductor, which specialises in the design and production of integrated circuits (ICs). The power IC products have completed the R&D phase and entered the mass production phase, with plans to supply 25 million chips globally between 2023 and 2025.

On the other hand, one of the vital input materials for the production of electronic circuits and semiconductors is phosphorus, which has also seen a significant gain due to increased demand. As a result, Đức Giang Chemicals benefits greatly as it is currently the largest exporter of yellow phosphorus in Asia.

On the stock market, even though only a few businesses related to the semiconductor industry are listed on the Vietnamese stock market, the majority of them have experienced rapid growth and are currently trading at their highs in several months, despite recent strong corrections.

So far this year, shares of Đức Giang Chemicals JSC (DGC) have risen 57.4 per cent to VNĐ90,500 a share ($3.7). They even reached a one-year high of VNĐ98,000 per share on 22 September.

Similarly, FPT Corporation (FPT) shares have seen a gain of 37.4 per cent and are currently trading at VNĐ93,500 a share. On 20 September, FPT shares were traded close to the threshold of VNĐ100,000 a share.

CMG Corporation (CMC) shares also recorded an increase of 17.5 per cent after more than nine months to VNĐ48,100. They reached this year's peak at VNĐ49,000 a share on 22 September.

Positive prospects

In a recent report, Dragon Capital assessed that the upgrade of the Việt Nam-US relationship will create favourable conditions for the US to promote the relocation of high-tech supply chains, such as the semiconductor industry, to friendly countries.

"Enterprises like FPT and DGC are expected to benefit, especially when they can take advantage of opportunities in the field of software and semiconductor technology,” said Dragon Capital.

According to Việt Dragon Securities Corporation (VDSC), FPT's international information technology services segment recorded a revenue growth of 30 per cent over 2022 in the first half of the year, while the international business division of CMC, which is in charge of software export service, also reported an increase of 62 per cent in revenue.

Both FPT and CMC benefit largely from Asian markets as businesses in the region are accelerating the transformation progress, which is said to have lagged behind global competitors during the pandemic.

VNDirect Securities Corporation recently expected that Đức Giang Chemicals’ net profit would rise 2 per cent from the previous quarter in the third quarter and continue to grow 4 per cent in the last quarter amid rising demand from the Indian and US markets.

“Phosphorus prices are expected to remain at $4,000-4,300 a tonne in the second half of this year and will increase to $4,600-5,000 a tonne in 2024. As a result, Đức Giang Chemical's net profit could reach VNĐ4 trillion in 2024, up 20 per cent from this year's estimate," said VNDirect. — VNS